Fury as NatWest bank glitch drags on

RBS is warning its 17 million customers that the backlog caused by a technical
glitch could take at least another two days to clear, meaning that the
computer failure will have lasted for more than a week.

More than 1,200 NatWest branches were opened on a Sunday for the first time in its historyPhoto: Justin Leighton

Customers deluged online forums with complaints yesterday, saying that they were unable to pay bills and were concerned about the impact it could have on their credit ratings.

The crisis has hit customers at RBS and two of its subsidiaries, NatWest and Ulster, and the bank admitted that the chaos caused by a technical glitch is so severe that it does not even know how many accounts are affected.

Yesterday, more than 1,200 NatWest branches were opened on a Sunday for the first time in its history, while a further 1,000 branches will be open until 7pm today in an attempt to ease the problem.

RBS has pledged to compensate affected customers by refunding overdraft charges or penalty fees incurred because of the computer glitch, and help them deal with credit rating agencies. However, it was not clear how long it would take to make refunds.

The Financial Services Authority, the regulator, urged other banks to be “lenient” with their own customers if they missed payments because transfers from RBS accounts had not come through.

The banks have pledged to refund their customers, but only if they contact them directly and are able to prove they have been hit by the technical failure.

Andrew Tyrie, the chairman of the Commons Treasury select committee, said: “It seems scarcely credible that something like this, which has caused problems for hundreds of thousands of people, could have gone on for so long. No doubt the committee will want a full explanation.”

Thousands of NatWest customers vented their frustrations on the bank’s website, with many saying they were running short of money to buy food or pay bills. “You have stuffed us,” said one from Corby, Lincs.

“We have to attempt to get to your bank in the morning. I’m disabled in a wheelchair and my daughter’s autistic but we have to as we have no food left and electric on less than 50p. Family of 6, it’s unfair and ridiculous”.

Another customer from the Midlands wrote: “I should have been paid Friday. I have cancer and I’m very ill at present. I’m down to my last pence and can’t afford electric meter.”

Gemma Pringle, from Somerset, said the inability to access her money had forced her to cancel her daughter’s fourth birthday party. “She had no birthday cake or her trip to Crealy [a theme park], nothing you do now can make up for this.”

The parents of a seven-year-old cancer victim flown to Mexico for treatment claimed yesterday that the hospital had threatened to turn off her life-­support system because it had not received a payment through NatWest. The hospital denied the claim but admitted that it was concerned that the money had not arrived.

Customers were further infuriated after NatWest charged them for ringing its emergency helpline by initially providing an 0845 number instead of a free 0800 number, although the bank later said it would reimburse the cost of the calls.

Royal Bank of Scotland is 82 per cent owned by the taxpayer after a £2 billion bail-out in 2009. Earlier this year, Fred Goodwin, the former chief executive who was nicknamed “Fred the Shred”, was stripped of his knighthood for his role in the bank’s failure, while Stephen Hester, the current chief executive, was forced to waive a £1 million bonus after public criticism.

Lord Oakeshott, a former Liberal Democrat Treasury spokesman, said: “Enough is enough. RBS has failed the nation for years on lending to small business. It is just as unacceptable as having water or power cut off for five days and counting, but without bad weather to blame.”

According to RBS, the problem began on Tuesday evening after a routine update of its software system blocked all overnight payments in and out of customers’ accounts.

Experts familiar with banking systems yesterday expressed incredulity that the upgrade was apparently done without proper backup or testing. RBS confirmed that the error took place in Britain, meaning that it most likely involved staff at the company’s Edinburgh-based IT centre.

Although the problem was resolved on Friday, it created a backlog of more than 100 million transactions. The bank admitted yesterday that it was only three quarters of the way through clearing the backlog and that while it hoped things would largely return to normal by today, the problems were likely to persist.

Susan Allen, the director of customer services at RBS Group, said: “The knock-on effects of this technical failure mean there will be bumps in the road. We will do everything we can to minimise further disruption.”

An RBS spokesman said it was “cautiously optimistic” it would get many of the problems sorted out today. He said that the IT issues would “not be done and dusted until Tuesday at least” and may persist for even longer.

Customers accused RBS of shedding staff and encouraging more customers to bank online, leaving people dependent on its website.